ByRandy DotingaFebruary 17, 2012

'For small countries involved in global conflicts, it appears that there are possibilities to play both sides off against each other in order to maximum both political gains and money,' writer Neill Lochery says of Portugal's role in World War II.

If you wanted out of Europe during World War II, all signs pointed to Portugal. The same was true if you were a spy and wanted in.

Neutral and seemingly weak, the little country on the Iberian Peninsula managed to play the world powers off each other and avoid invasion. Meanwhile, desperate refugees crowded the streets of Lisbon while a dictator fought to survive and boost his country's wealth.

Neill Lochery, a historian best known for work analyzing the Middle East, chronicles the struggles and success of Portugal in his new book Lisbon: War in the Shadows of the City of Light, 1939-1945.

Q: Lisbon sounds like a combination of both Casablanca (the movie version, at least) and Switzerland. Is that a valid comparison?

A: To me, Lisbon was the real Casablanca, the only city where the allies and axis powers openly operated in Europe. It had all the diamond traders, the refugees, people with letters of transit, people trying to get letters of transit to get to America.

The British operations manager said it really resembled Casablanca twenty-fold. That was the atmosphere of Lisbon. But your point about Switzerland is well taken. One of the key questions was neutrality, and the success of maintaining neutrality was a great challenge for the Portuguese.

Q: What made Lisbon useful to people trying to get out of Europe?

A: Once France fell in summer of 1940, and specifically Paris fell, refugees started streaming to the south of France. As Germany consolidated its control, they moved into Spain and Portugal to try to get out of Europe to get to America or somewhere else in the free world.

Many of these refugees were Jewish, and they were desperate to escape the horrors of the Nazis. As Arthur Koestler said [in a 1941 book], "Lisbon was the bottleneck of Europe." It was the last chance to get out.

[Koestler, a journalist, added that Lisbon was "the last open gate of a concentration camp extending over the greater part of the Continent's surface."]

Q: How easy was it to get out of Lisbon to a place like America?

A: It was very difficult. The leader of Portugal, António de Oliveira Salazar, saw the refugees as a hugely complicating factor. He's trying to maintain Portugal’s neutrality, and feared a German invasion of Portugal. The Portuguese also feared a proxy invasion by Spain, particularly during 1940 and 1941.

He had to juggle a lot of balls in the air. There was a hugely important complicating factor in the question of tungsten, a rare ore that’s mined in the northeast of Portugal and is absolutely vital to arms industries. Without tungsten, it's impossible to produce weapons. So you can see where this is going.

This was the key issue between the allies, the Germans and the Portuguese in the war: Would Portugal supply the Germans with tungsten? Salazar refused to stop selling to Germany.

Q: You write about Aristides de Sousa Mendes, a Portuguese consul in Bordeaux, France, who turned out to be a Schindler-like character who saved lives at risk to himself. What's his story?

A: Against the wishes of Salazar, he granted visas in May and June 1940 to a number of people specifically of Jewish origin to travel though Portugal. This in effect helped create the refugee crisis in Portugal, but also got a lot of Jews out of France.

We hear numbers talking about 30,000 people, but I think we're talking about a couple thousand.

Salazar was furious at him for doing this, and it caused an enormous amount of trouble for Portugal. He was recalled back to Lisbon, he was essentially put on trial and disciplined. Salazar basically killed his career.

Now, he's regarded as a hero.

Q: Do you think he's a hero?

A: I don’t think any major single character in the book is completely a hero or completely a villain. Just when you’re about to paint someone as an evil character, you see something that intrigues you and you think, well…

Q: Salazar, the Portuguese leader, comes across as an unusual sort of character -- a savvy dictator. What do you make of him?

A: He had a good war. He made an enormous amount of money for Portugal through the selling of tungsten.

He demanded the Germans pay in gold. It became very clear very quickly that the Germans were not using their own gold, that it had been stolen from central banks of Holland, Belgium and France and, from 1943, that Germans were using gold stolen from victims of the Holocaust.

There were 400 tons of gold, worth around $20 billion-plus in today's dollars.

But just when you're about to paint him as an evil dictator, the fact is that he never spent the gold, and he was in power until 1968.

Q: Why do you think Salazar didn't spend the money on his people?

A: My guess is that part of his philosophy is that you don’t spend more than you earn. It's better to be poor but not in debt, which is kind of ironic considering what’s going on today.

Q: Portugal is hardly a wealthy country, then or now. Where did the gold go?

A: Efforts to trace the gold have been met with silence. Most of it, I think, was laundered out.

But… the Catholic church here in Portugal has a big shrine in Fatima. Every year pilgrims come there. The Catholics wanted to upgrade the shrine, and they sent all these trinkets and gold bits to the Bank of Portugal to have them melted down. What came back were gold bars that still had swastikas on them.

Q: You're talking about Portugal's debt crisis. If the money is still around, could it play a role in that mess?

A: If Lisbon has $20 billion worth of gold, then it puts a different spin on when you look at events that are currently going on.

Portugal received a bailout last year, and just before it received it, a senior member of a coalition in Germany made a suggestion that maybe Portugal should sell the family silverware before it asks for money. As far as I know, that was met by stony silence, a quite eerie stony silence.

Clearly, the Germans believe that Portugal should spend some of this gold. That has interesting dynamics -- a German asking the Portuguese to sell their gold.

Q: What was the legacy of Portugal's role in the war?

A: I'm sitting you here talking to you in Lisbon, the center of Portugal, which wasn't bombed, even though the Luftwaffe was a couple hundred miles away in Bordeaux. It's quite unusual to have a major European capital that wasn't bombed in the war.

Salazar managed to avoid a Spanish invasion and made money out of the war for Portugal. He also granted both the British and Americans access to the Azores, islands that were vitally important to both the British and Americans in terms of U-boat warfare.

Salazar and Portugal basically played a very complicated game, and played it very well. Whether it's morally right or wrong, this was an opportunity for the Portuguese.

For small countries involved in global conflicts, it appears that there are possibilities to play both sides off against each other in order to maximum both political gains and money.